MoonFox Analysis | Grabbing the Market, Consumption Transformation under the Low Price Strategy

Core Insights - The consumer market in China is gradually recovering, with total retail sales of social consumer goods reaching RMB 47.15 trillion in 2023, a year-on-year increase of 7.2% [2] - A significant shift towards low-price strategies is observed across various industries, driven by macroeconomic factors and changing consumer behavior [3][20] - The tea-based drink market is experiencing a transformation from high-end pricing to cost performance, with brands like HEYTEA and Nayuki adopting price reduction strategies to attract consumers [4][7] - The coffee market is also undergoing intense competition, with brands like COTTI COFFEE leveraging low prices to gain market share [9][11] Group 1: Consumer Market Trends - The consumer market is under pressure, with consumers prioritizing savings over spending, leading to a cautious approach in budgeting [3] - The low-price strategy is becoming increasingly popular among enterprises, particularly in lower-tier cities, as competition intensifies [3][20] Group 2: Tea-Based Drink Market - HEYTEA has shifted its focus to innovative products and IP co-branding strategies after facing pressure from high pricing [5] - The brand has successfully increased its applet MAU to over 15 million by implementing price reductions [7] - HEYTEA's strategy includes expanding into lower-tier cities and increasing the number of stores beyond first-tier city core business districts [8] Group 3: Coffee Market Dynamics - COTTI COFFEE has rapidly grown by adopting a low-price strategy, surpassing Starbucks and Luckin Coffee in offline customer flow despite having fewer stores [10] - The average order value for COTTI COFFEE has been reduced to RMB 8.8, intensifying competition in the coffee market [11] - The price war between brands like Luckin and COTTI has established low pricing as a core feature of the coffee market [11] Group 4: E-commerce and Gaming Industry - E-commerce platforms like Pinduoduo, Taobao, and JD.com are increasingly adopting low-price strategies to enhance market share and consumer loyalty [13][15] - The gaming industry is also seeing a trend towards lower-priced offerings, with developers focusing on competitive pricing to capture market share [17] - The integration of low-price strategies across various sectors is leading to intensified competition and market share erosion among leading platforms [16]